Hi there,
I am looking for creative financing options to purchase an investment property. The story is that I have the opportunity to purchase 10acres of land and a house in a rapidly rising area of Victoria, close to Melbourne, near the beach etc. Am buying it off a family member so may be able to avoid agents fees etc.
However, the loan would need to be for about 800k, and I have no way of servicing the debt. I have enough equity in PPOR and other IP to guarantee an LVR of ~ 85% even if borrowing 100% of the value of the property. However, servicing the debt, at least for the next 3-5 years will be nigh on impossible.
Aside from combining with close family members or friends, can anyone offer some options – no matter how way out they seem?
Thanks again.
If you can't service the loan, then maybe you shouldn't get it. There is nothing worse than seeing clients who over extend and then lose the lot.
If you had a low LVR, you could borrow more and use this to help with the repayments, but 85% is very high and the price is very high too, adding to the risk.
Alternatives
What about taking an option over the property?Get the seller to vendor finance it to you. ie you borrow the deposit from them interest free, or low, helping to reduce repayments.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
As you are buying it off a family member why not see whether there is some Vendor Finance option with deferred interest repayments or similar.
Richard Taylor | Australia's leading private lender
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